As a freelancer, managing your client payments effectively is key. You need to make sure you're paid the correct amount and on time. If not, this can be highly stressful, especially as it may threaten the existence of your business. Plus, you'll need to know exactly what you have earned to be able to report this to HMRC too. Find an Accountant near me. 

If you're new to self-employed life or are looking to fine-tune your skills, here are our top tips on how to keep on top of client payments as a freelancer to guide you. 

Get Organised

So that unpaid bills don't slip through the net, you need to develop a logical system to manage what your clients owe you. It can be as simple as a spreadsheet that lists all of your incomings and outgoings. Or you can use accounting software that automatically invoices your clients on your behalf. 

The invoices need to state your company name, how much is owed and what the service or product was. The same information should be recorded from your end so that you know what money you are owed and when it needs to be paid by. Keep this information in a visible spot and check in with it every day. 

Start Bookkeeping

The best way to record what your clients have paid you is through bookkeeping. This will allow you to track every payment that has come into the business, as well as what's left it. If you're not sure how to do bookkeeping, you can either take a course on it or outsource your books to a professional instead. 

Bookkeeping will allow you to manage your payments, and flag up any outstanding unpaid bills. It will also give your accountant the best chance at submitting your tax returns accurately and on time. Plus, by reviewing your books periodically you can get a better view of how your business is performing. 

Deal With Late Paying Clients

Late payments owed to SMEs amounts to a staggering £13 billion every year. Even a small sum of money that's left unpaid can have a devastating impact on a business, especially in a time of economic uncertainty. That's why every freelancer must have a constructive method of managing their income. 

If the project involves large sums of money, you can ask for a deposit or 50% of the total value upfront. Alternatively, you can include a late payment clause on your contract. HMRC has a system to enforce late payments, which can be instigated after 60 days have passed since the balance was due. Even though it's never a fun task to deal with late paying clients, it's important you don't allow the situation to drag on. It's also worth having a solicitor draft up a template letter for you, which you can send out should such a situation occur. Find a local Bookkeeper. 

To Sum Up

Issuing invoices and chasing up client payments isn't why you decided to become a freelancer. But it is what you need to manage effectively if your business is to continue operating. By getting on top of your bookkeeping and dealing with any late paying clients promptly, your freelance business has the best chance of success.